NEW YORK — U.S. stocks plunged Wednesday as investors ramped up their selling of high-flying technology and internet stocks. The Dow Jones Industrial Average fell 831 points, its worst loss in eight months.

Although the losses were widespread, stocks that have been the biggest winners on the market, including technology companies and retailers, suffered steep declines. Apple and Amazon both had their worst day in 21/2 years.

The Nasdaq composite, which has a high concentration of technology companies, suffered its biggest loss in more than two years and has dropped almost 8 percent since the start of October.

Stocks have slumped over the last week as a combination of strong economic data and positive commentary from Federal Reserve leaders sent bond yields rocketing higher as investors bet that interest rates will keep rising.

Big moves in interest rates tend to unsettle investors, and they can also push them to sell stocks and buy bonds instead. And there is still an overhang from the U.S. trade dispute with China, which accounts for sizeable portions of some tech companies’ revenue.

Alec Young, managing director of global markets research at FTSE Russell, said investors fear that rising interest rates and growing expenses are going to erode the boost company profits have gotten from the Republican tax overhaul.

“The tax cuts juiced earnings this year and that’s not sustainable,” he said. “The market’s starting to say that the glass may be half empty.”

The Dow Jones Industrial Average gave up 831.83 points, or 3.1 percent, to 25,598.74. The S&P 500 index sank 94.66 points, or 3.3 percent, to 2,785.68. The benchmark index fell for the fifth straight day, which hadn’t happened since just before the 2016 presidential election.

The Nasdaq composite, with a large contingent of tech stocks, tumbled 315.97 points, or 4.1 percent, to 7,422.05. It’s fallen 7.5 percent in just five days.

The Russell 2000 index of smaller-company stocks shed 46.45 points, or 2.9 percent, to 1,575.41.

The market had enjoyed a stretch of relative calm, where even big intraday losses were erased by the end of the day. But over the past five days, the losses stuck, and on Wednesday the selling went on right to the closing bell.

GIVING UP THEIR GAINS

Some of the big losers were stocks that have scored double-digits gains earlier in 2018. Apple gave up 4.6 percent to $216.36 and Microsoft dropped 5.4 percent to $106.16. Amazon skidded 6.2 percent to $1,755.25 and Alphabet, Google’s parent company, gave up 4.6 percent to $1,092.16.

Amazon has soared 50 percent this year, but has fallen 14 percent from its all-time high in early September. Alphabet has dropped 15 percent since late July.

Insurance companies dropped as Hurricane Michael continued to gather strength and came ashore in Florida bringing winds of up to 155 miles an hour. Berkshire Hathaway dipped 4.7 percent to $213.10 and reinsurer Everest Re slid 5.1 percent to $217.73.

RISING BOND YIELDS

Although the yield on the 10-year Treasury declined toward the end of the day, its jump from 3.05 percent early last week to more than 3.20 percent – a seven-year high – has spooked investors. The yield was just 2.82 percent in last August.

Bond yields and, therefore, interest rates have been rising for more than two years as the U.S. economy grew strong. When yields rise for that reason, it is generally good for stocks. But eventually the high rates worry stock investors, as higher rates tend to increase borrowing costs and cut into profit margins. They also make bonds more attractive investments.

Technology and internet-based companies are known for their high profit margins, and many have reported explosive growth in recent years, with corresponding gains in their stock prices.

Gina Martin Adams, chief equity strategist for Bloomberg Intelligence, said the stocks have become more volatile in the last few months because investors have concerns about their future profitability.

“Amazon recently announced they were increasing wages, Facebook is spending a ton on security,” she said. “Semiconductors have the most exposure to China out of segments in the S&P 500.”

Benchmark U.S. crude oil fell 2.4 percent to $73.17 a barrel in New York. Brent crude, the international standard, lost 2.2 percent to $83.09 a barrel in London.

Wholesale gasoline shed 2.7 percent to $2.02 a gallon. Heating oil fell 1.2 percent to $2.39 a gallon. Natural gas rose 0.6 percent to $3.28 per 1,000 cubic feet.

Augusta and Waterville news

Get news and events from your towns in your inbox every Friday.


  • This field is for validation purposes and should be left unchanged.